We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies. You can view our cookie policy and edit your settings here, or by following the link at the bottom of any page on our site.

Can ASOS fill the gap back to £45?

The online clothing retailer's shares have continued to make steady progress since last October’s lows.

share

anonymous

2015-03-09T14:56:00+0000

Source: Bloomberg

On Thursday 12 March ASOS is due to post its second-quarter figures and the focus for the company will be on sales. The market expectation is for it to continue in the right direction. Last quarter saw the company hit £246.329 million in sales and this is called to increase to £287 million. Considering the second-quarter sales figures last year were £139.159 million this represents sizeable progress.

The institutional outlook for the company still remains resilient regardless of some of the issues the firm has had to tackle in the last 12 months. Currently there are 13 firms with a buy recommendation, nine with a hold and eight with a sell. The average 12-month price target for the company is £29.65 and the current share price is already 10% above this level.

ASOS found 2014 a very difficult year as it struggled with currency exposure-denting figures. The company’s Barnsley warehouse suffered major damage from a fire as almost 20% of the stock on the premises was ruined. While the company was up and running 48 hours later, offering discounted sales, the whole event will have cost the company around £30 million in lost revenue and disruption.

The CEO of ASOS, Nick Robertson, has sold a £20 million stake in the business after a difficult year in his personal life which is likely to have more to do with this decision than the current state of the business.

On the back of last year’s fire the shares dropped from £46. The current level just below £34 will be a difficult hurdle to clear as the stock tries to fill the gap after this disaster. The trend higher is strong and the moving averages are all supportive while the shares are yet to reach over bought territory.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

CFDS are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

The information on this site is not directed at residents of the United States and Belgium, or any particular country outside Switzerland and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.